Why Uranium Energy Stock Rallied as Much as 10.5% Today
Shares of Uranium Energy (NYSEMKT: UEC) rose by as much as 10.5% on Monday. Although the uranium company didn't hold on to all of that advance, the stock was still up by nearly 10% as daily trading drew to a close. The interesting thing is that the company filed a prospectus with the Securities and Exchange Commission that might normally be considered a negative.
On May 14, the last day of trading before a weekend, Uranium Energy filed a shelf registration with the SEC for up to $200 million worth of warrants. These securities give investors the right to buy stock at a pre-set price sometime in the future. There's no time frame on when the warrants will be sold or how many, but in the end the result will be more shares of stock. The sale of these securities and their ultimate conversion into shares would lead to shareholder dilution, which most investors consider a bad thing.
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Source Fool.com
